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									Slide 1




     SUPPLY CHAIN MANAGEMENT
          – AN OVERVIEW



                 Chwen Sheu
            Paul Edgerly Chair Professor
              Kansas State University
          (CSCMP Kansas City Roundtable)
Slide 2




               PRESENTATION OUTLINE
          I.     SUPPLY CHAIN
                 MANAGEMENT (SCM):
                 INTRODUCTION
          II.    WHY IS SCM IMPORTANT?
          III.   GREEN SUPPLY CHAIN
                 MANAGEMENT
Slide 3




           1. SUPPLY CHAIN
          MANAGEMENT (SCM)
Slide 4



                SEARCHING … …
          “SUPPLY CHAIN MANAGEMENT”

          Yahoo?


          Google
Slide 5



                   WHAT IS SCM?
           Supply Chain
             A network of of suppliers, manufacturers,
              warehouses, 3PL, retail outlets,
              customers.

           Supply chain management (SCM)
             The management of flows between and
              among supply chain stages to maximize
              total supply chain profitability
Slide 6


          Traditional Supply Chain Systems
Supplier        Manufacturer      Manufacture    Wholesale      Retail   Customer
(1st,2nd ,…)    Plant             Distribution   Distribution
                                  Center         Center




                 3rd Party Logistics
                 Providers (3PL)

               Material Flow
               Information Flow
Slide 7



          BEEF SUPPLY CHAIN
Slide 8



            IC SUPPLY CHAIN

                光罩業       封裝材料
                           業
          矽晶圓


          化學品   IC製造業     IC 封裝測
                             試業

          氣 體
                        OEM

                 IBM
Slide 9




           SCM Survey:
          2004 IT Industry
             (236 firms)
Slide 10


           How IMPORTANT is the SC function to your
           organization's business strategy ?
Slide 11

           Who is directly RESPONSIBLE for
           determining your SC operations?



      Up from 14.2%
      in 2003
Slide 12


           Compared to 2003, how is your SPENDING
           on SC likely to change in 2004?
Slide 13




           II. SCM: WHY IS IT
               IMPORTANT?
Slide 14




           SCM: IT’S A NEW BALL GAME

            Improves Competitiveness
             Efficiency
                Cost: “Lean manufacturing”  “Lean
                 supply chain” (e.g., Boeing)

             Responsiveness
                Customization (e.g., Dell)
Slide 15




           Efficiency: Boeing Example


                 ~70% of Product Cost
                 Total                Total
              Supplier Base   Dollars Spent in 2002
                 6,193              $ 22.6B
Slide 16



                    Responsiveness: Dell

              Why SCM?
                A win-win partnership
                Value-added


           “We focus on how we can coordinate our
           activities to create the most value for
           customers.”
                                       - M. Dell
Slide 17



                                                     Retailer

                   Assembly Plants
   Supplier                              (3PL)




              重新洗牌                               Responsive

                                                        (3PL)
              Supplier           Assembly Plants
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                   CREATING VALUES
       Tradition: Time Consuming & Costly
       Producers   Shipping   Eastman     Wait …       Eastman
                              Warehouse                IT Dept



                                     Eastman       Open the boxes
                                    Employees         & Load
Slide 19




     Implementing SCM requires a fundamental
          change in the way firms operate




           “Gee, we've never
           done that before,
           but why not? Let's
           give it a try.”
Slide 20


               PARTNERSHIP &
                Bullwhip Effect
           P&G found that
           • Demand variability (Pampers) increases for SC
             members located farther upstream (1:10)




              Retailer   Wholesaler   P&G       3M
Slide 21

       What You See Is Not What They Face




           Lee, H, P. Padmanabhan and S. Wang (1997), Sloan Management Review
Slide 22




            III. GREEN SUPPLY
           CHAIN MANAGEMENT
                   (GSCM)
Slide 23




           GSCM = SCM + EM
Slide 24




           “I think God's going to come down and pull
           civilization over for speeding.”
                             — Steven Wright
Slide 25



                 ENVIRONMENTAL
                MANAGEMENT? WHY?
           12 tons of CO2 per capita are
            produced per year. Only 8% of this
            emission is managed by nature.
           The average temp of the Earth could
            raise up to 5ºC by the end of 21
            century  Sea level could rise up to
            100 meters.
           A visit to Amsterdam could be soon a
            submarine visit.
Slide 26



                            EM? WHY?
            60 % of managers considered environmental
              issues to be highly important, 82 % expected
              the importance would further increase in the
              years to come (2002).
            “… a new industrial revolution. It is the most
              forceful trend in my lifetime ... it will redefine
              the rules of the game.” (CEO, Sony)
Slide 27
Slide 28




           Waste Electrical and Electronic
           Equipment (WEEE)


           Restriction of Hazardous
           Substances (RoHS)

           Energy-using Products (EuP)
Slide 29



                EM – DEVELOPMENT
      USA
     a. Total cost of compliance over the past 25 years have
        exceeded $1 trillion (~$120 billion annually).
     b. 1970s: 2000 federal, state, and local e-regulations;
        Today: 100,000. Business in LA must answer up to
        72 separate authorities.
     c. Computer Takeback: Among 28 global computer
        firms, U.S. computer firms rank 9th (Apple), 11th (HP).
       d. 80% of consumer are willing to pay more for green.
       e. Dow Jones Sustainability Index
       f. “It's a difficulty for European firms, and it's a huge
          difficulty for American firms.”
Slide 30


                 EM – DEVELOPMENT
    Japan
      63% of Japanese consumers are willing to pay
       5% more, 27% pay 15% more for green
       products.
      Green Products
           • Toyota Hybrid Prius uses half the petrol &
             emits only half the carbon dioxide.
      Sony Green Partner
     Europe
      No kidding!!!
Slide 31




           TOYOTA Eco-Friendly Prius
                  ~$20,000
Slide 32


                        EM & TQM
           Total Quality Environmental
           Management (TQEM)
            Prevention is better than compliance
            Continuous improvement & innovation:
             technology, process, design, material
               Must involve suppliers
            Benefit outweighs cost  EM Is Free
Slide 33


             EM – BUSINESS IMPACTS
     • Pepsi: Saved $44 million      • Texas Instruments:
       by switching from              Saved $8 million each
       corrugated to reusable         year by reducing its transit
       plastic shipping containers    packaging budget for its
       for one liter & 20 oz          semi-conductor business
       bottles, conserving 196        thru source reduction,
       million lb of corrugated       recycling & use of
       material.                      reusable packaging.

     • Commonwealth Edison:          • Dow Corning: Saved
       Produced $50 million in        $2.3 million by using
       financial benefits from the    reconditioned steel drum
       implementation of Life-        in 1995. It also conserved
       Cycle Analysis approach.       7.8 million lb of steel.
Slide 34

              GSCM – LIFE CYCLE
             ANALYSIS/ASSESSMENTRecycle
                                                  Retailer/    Reuse
    Design   Raw Mat.   Logistics   Manufacture   Customer    Disposal
Slide 35



           CRISIS? OPPORTUNITY?
Slide 36




           “… We are convinced that
           being good to the environment is
           also good for business – and
           have every intention of keeping it
           that way.”

                 - 1997 Xerox EHS Progress Report

								
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